The JV is an interesting development since it was only a little over a year ago that eBay acquired all the outstanding common shares in Gmarket for US$ 1.2 billion, a deal that intended to lift up eBay’s existing Korean marketplace business, Internet Auction Company, by merging it with the market leader. Apparently the venture has been a big enough success for eBay that it has decided to “double down” on Gmarket’s laeder and partner with him again to help expand eBay’s footprint into Japan, Singapore, and elsewhere in Asia.

According to eBay’s announcement the new JV “will strengthen eBay’s presence in Japan and Singapore – where the e-commerce markets are expected to grow by 30% and 13% respectively between 2009 and 2012—and provide a foundation for longer term expansion of Gmarket into other Asian markets.”

Mr. Ku will be CEO for the new entity,

the new JV will have no impact on Gmarket’s Korean operations but will leverage the company’s existing presence in Japan and Singapore,

eBay will own 49% of the JV and Mr. Ku will own 51% through a yet-to-be-named entity he will control,

Each party in the JV will contribute approximately US$ 10 million to the new entity,

eBay will also contribute local Japanese and Singaporean business assets as well as contribute the cost of licensing Gmarket’s technology to the new venture,

Mr. Ku will contribute his local management expertise to running the operations.

“We are excited to join with eBay, one of the world’s most recognized e-commerce brands, in combination with our management team’s proven track record of establishing successful online marketplaces. The joint venture will allow us to provide an enhanced e-commerce experience tailored for the Japanese and Singaporean markets, and to capitalize on our companies’ experience in the Asian e-commerce industry.”
– Young Bae Ku, CEO, Gmarket and new JV to enter Japan and Singapore

Back in March we reported on the series of deaths at major OEM Foxconn Technology Group (PINK: FXCNY | (part of Hon Hai Precision Industry Co. Ltd.) TPE: 2317). Well, the deaths just keep coming. On May 6 at 4:30am, Lu Xin, who joined Foxconn in August 2009, jumped from the 6th floor of the VIP hotel in Foxconn’s Long Hua site.

Chinese media are reporting (link in Chinese) that Mr. Lu had been exhibiting abnormal behavior prior to his death. On April 30th he had told his friend, Mr. Zeng Hongling that he was being followed and there were people trying to kill him. Mr. Zeng reported the situation to his supervisor; the supervisor asked Mr. Zeng and another close friend of Mr. Lu to accompany Mr. Lu. In the following days, Mr. Lu had stated he wanted to go back home to Hunan province, but when his friends offered to buy him a train ticket he changed his mind.

At the suggestion of a counsel, Foxconn contacted Mr. Lu’s parents and asked them to travel to Shenzhen to visit him. However, due to the May 1st National holiday, his parents could only get tickets for May 5. They were scheduled to arrive in Shenzhen at 9am on the 6th.

Mr. Lu knew his parents were coming. Foxconn arranged to have him and his two friends stay at the hotel. They went to sleep at around 1:30am. At around 4:30am, Mr. Lu got up and claimed Read the rest of this entry »

Round 1: In December 2006 a group of angel investors, including serial entrepreneur Lei Jun, invested RMB 4 million (US$ 585,000) in UC Mobile (formerly UCWeb),

Round 2: In 2007 the company received RMB 68.3 million (US$ 10 million) from professional VCs such as Ceyuan Ventures and the Morningstar Group,

Round 3: In May 2009, Alibaba Group joined with previous investors, Ceyuan and Morningstar, to inject approximately RMB 81.9 million (US$ 12 million) into the company,

So it is very possible that this latest round is in the neighborhood of RMB 100 million or more. The company’s CEO claims it’s the largest round for a mobile Internet company in China. The new funds are expected to be used to continue aggressive product R&D and increased staffing.

According to news sources such as China Venture, the valuation for UC Mobile is likely to have jumped to several hundred million US dollars as a result of this latest round.

“It’s so glad that NGP become as UC’s strategic investor, which is another milestone of UC Mobile. We believe, NGP will enhance UC’s growth through its abundant experience in global mobile telecom industry. Meanwhile, as the leading mobile internet enterprise holds core technology competency and independent knowledge right in China, UC has China’s biggest mobile application software R&D team, tens of patents.”
– Mr. Yu Yongfu (link to bio in Chinese), CEO, UC Mobile

China’s Internet industry is generally compared to the US in terms of its greater size rather than its greater revenues. The idea you get from these comparisons is that China’s Internet businesses (eg – advertising, e-commerce, etc.) have lots of room to grow as more Chinese get online access (via broadband or mobile) BUT that spending habits by both consumers and subsequently businesses still signficantly trail the Western markets which have been under development for much longer. Of course, if you’re looking ahead it’s only a function of time before the Chinese markets mature, shopping and advertising behaviors evolve and Chinese online spending begins to challenge and eventually pull ahead of the US.

With that in mind, the Beijing Times (via China Media Monitor Intelligence) reported that consumer-to-consumer (C2C) shopping website Taobao (owned by privately held Alibaba Group) currently accounts for over 40 million page views per day. According to online traffic research company, Alexa, the Chinese e-commerce company ranks as the #14 most visited website in the world compared to #20 for Amazon.com, Inc. (NASDAQ: AMZN) and #25 for eBay Inc. (NADAQ: EBAY).

Close to 50% (190 million users) of the total online Chinese population are registered on Taobao and the company’s CFO has said that it plans to double its page visits by the end of 2010.

Leading Chinese search engine, Baidu, Inc. ((ADR) NASDAQ: BIDU), announced last week its unaudited financial results for the first quarter ended March 31, 2010. The big news that is making the rounds is how substantial the company’s revenue gains have been as a result of the departure of Google Inc. (NASDAQ: GOOG) from the mainland Chinese market. Baidu has really been successful at managing through a bunch of potential crises including the initial lukewarm expectations of its new Phoenix Nest advertising platform which has turned out be very successful and the departure of several senior executives at the start of the year. While the Google imbroglio has certainly given the company a lot of cover, nothing should be taken away from its success in handling a very fluid environment in China.

Key financial highlights for Q1 2010 include:

Total revenues in the first quarter of 2010 grew 59.6% Year-over-Year (YoY) to RMB1.294 billion ($189.6 million),

Operating profit in the first quarter of 2010 grew an astounding 167.4% YoY to RMB530.8 million ($77.8 million), and

Net income in the first quarter of 2010 grew 165.3% YoY to RMB480.5 million ($70.4 million).

“We delivered a quarter of record revenue and strong profitability despite the usual seasonality associated with the Chinese New Year holiday. In particular, Phoenix Nest’s performance continued to exceed our expectations as customers increasingly appreciate the new platform’s advanced tools and superior return on investment. Looking ahead, we will continue to innovate and educate Chinese companies about the benefits of search engine marketing with Baidu.”
– Robin Li, CEO, Baidu.

Key operating highlights for Q1 2010 include:

The company surprisingly lost active online marketing customers in Q1, dropping .9% QoQ from 223,000 to 221,000 but increasing 19.5% YoY,

Despite the small contraction in its customer base the company succeeded in driving higher revenues with a higher average revenue per user (ARPU). Baidu’s ARPU grew 34.1% YoY and 3.5% QoQ to RMB5,900 ($864),

Traffic acquisition costs (TAC) of RMB171.3 million ($25.1 million) accounted for 13.2% of total revenues compared to 15.3% in the year earlier period and 16.0% in the previous quarter.

Advertising: The company completed its migration from its old advertising platform to its new Phoenix Nest on December 1 of last year and have been using the new system to acquire new customers and increase average revenue per user. According to Robin Li, “customers appreciate Phoenix Nest’s higher quality, more relevant paid links and wider Read the rest of this entry »